Israeli cyber firm Votiro raises $11.2 million from Aussie investors

Israeli cyber security company Votiro Cybersec has closed a $11.2 million capital raise from Australian investors, ahead of an imminent expansion down under and an IPO on the Australian Securities Exchange.

The company's pre-IPO round, which it said was oversubscribed, saw cornerstone investor Daniel Sekers' Divergent Group return, in addition to Redfield Asset Management and a range of undisclosed high-net-worth backers and small funds.

Votiro chief executive Itay Glick told The Australian Financial Review that interest in the round was boosted by the number of high-profile attacks in recent weeks, such as WannaCry and Petya, which he believed would have been prevented with Votiro's technology.

The company has patented a process known as 'content disarm and reconstruction', which involves breaking down files into objects, neutralising any malicious code and reconstructing the file into a safe-to-use and fully functional file. This lets the company prevent unknown threats, known as zero-day exploits.

"In the WannaCry example, you could have an email sent to you and when you open the attachment it installs the malware and starts propagating in the network," Mr Glick said.

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"With Votiro, we'd neutralise the attachment before it goes to the user. When the user opens the email, they'd either see a blank document as the attachment or the as it was without the malware."

Experts have said WannaCry was not spread by emails, rather by targeted attacks on organisations using older versions of Windows, however many attacks are propagated by phishing emails.

The cyber security firm launched in 2010 and its founders Mr Glick and Aviv Grafi both previously served in the 8200 cyber-warfare unit of the Israeli defence force.

In May the business was named as one of Gartner's "cool vendors" of 2017.

Melbourne or Sydney

Mr Glick said the company was in the process of choosing between Melbourne and Sydney for its new headquarters, and a decision was expected in the coming days.

"Australia is investing heavily in being a global player in cyber security, and regionally it sits well with Asia Pacific as our fastest-growing region," he said.

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"There is some heavy competition between the states and we're looking at how they can best assist the business. It could be an incentive plan, tax credit, or if they are able to make introductions for us to the right people.They're very aggressive on the incentives and we're trying to get the best for the business."

In the first half of the year, the company claimed to have grown sales more than 600 per cent, but it would not disclose sales or revenue figures. It also now has 1.5 million users from governments, defence forces, financial institutions, critical infrastructure, hospitals and stock exchanges.

When asked why so many zero-day exploits still occur when technology such as Votiro's exists, Mr Glick said the challenge was to convince companies they needed to upgrade their current cyber defences.

"Organisations are used to using what they already have and they don't know to invest in something new unless someone tells them they're extremely exposed," he said.